The Ministry of Corporate Affairs (MCA) has extended the deadline for holding the Annual General Meeting (AGM) by companies from September 30 to December 31, owing to COVID-19.
Every year, companies hold their AGMs towards the end of the six months of the financial year, starting from April.
This move is likely to be a big relief for around 12 lakh companies. “Many companies may not be able to meet the September 30, 2020, deadline for auditing accounts. Even the due dates of audit and income-tax filings have been extended till November 2020,” said Anubha Sital, Partner, IndusLaw.
The Registrar of Companies (RoC) issued the order at the MCA’s direction.
“COVID-19 has caused some delay on the part of some companies in the proper maintenance of audited books. Also, there was such a demand from many associations," a source told Moneycontrol.
“This extension is a big relief for a large number of companies which are still struggling to get business back on track and save non-compliance penalties. A similar extension has been granted by the Singapore regulatory authorities also,” pointed out Sital.
Move aimed at helping smaller firms
According to Amit Tandon, Managing Director, Institutional Investor Advisory Services (IIAS), “Most NSE 500 companies have either held their AGMs or announced the dates as they have to give a 21-day notice. This waiver is aimed less at listed companies and more at the long tail of smaller companies that still need to comply with these regulations but have been unable to deal with the challenges because of the pandemic.”
Some experts said that the government should have issued this order long time back as most companies have already announced their AGM to comply with the 21-day notice.
Prasenjit Chakravarti, Partner, Khaitan & Co, said: “The RoC has suo moto
issued a blanket three-month extension to companies within its jurisdiction. This will save the RoC from being inundated with a flurry of applications from several companies. Equally, companies will be saved from the trouble of moving an application and avoid unnecessary paperwork.”